Expanding Your Business with Growth Equity

About the Episode

Join us for a discussion with Richard Luftig about growth equity and its position in the private equity and investment world. We discuss raising equity capital, how growth equity is used and varies from other financing options, and how recent regulatory changes are impacting financing. Listen in as Richard brings over 25 years of experience in private equity and investment banking to our conversation. Richard worked with Credit Suisse First Boston, Ivy Asset Management Corp, and Bear, Stearns & Co. before co-founding Castle Placement, providing investment banking and private equity services for a wide range of companies.

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In this Episode

Highlights

• Always consider the pre-money valuation and cost of capital when raising equity capital.
• Equity financing is best for businesses operating in industries with favorable valuation metrics.
• Venture capital and growth capital are both considered private equity – that is, equity that is private.
• A growth equity investor is investing heavily in the existing management team, as opposed to a company making an acquisition.
• An entrepreneur looking for growth equity is looking to stay and grow their business, as opposed to an entrepreneur looking to be acquired, who is usually looking to get out.
• Growth equity investors want the entrepreneur to hold a meaningful amount of equity.
• Most M&A nomenclature is not universally defined and consistently used. Much industry jargon in the investment banking and M&A industry is imprecise. For example, the terms recapitalization, fair market value, or EBITDA (e.g., adjusted vs. unadjusted) can have different meanings to different people in the industry.
• The JOBS Act loosened regulations instituted by the SEC, which has improved the ability of entrepreneurs to raise capital.
• Liquidity is the lifeblood of any healthy marketplace.

Learn More About This Episode

• What’s a ‘Main Street’ vs. a middle-market company?
• M&A Basics | Why Do Business Owners Sell Their Business?
• Crossroads: Deciding to Sell Your Business vs. Doubling Down
• Should I sell my business?
• EBITDA | Definition, Formula & Example – A Complete Guide

Meet Our Guest

Richard Luftig

Managing Partner of Castle Placement | New York, New York

Richard co-founded Castle Placement in 2009, providing investment banking services and raising private equity/debt capital for early-stage and middle market companies across a wide range of industries including financial services, real estate, technology, business services, energy, and consumer and retail sectors. He has over 25 years of experience in investment banking, capital markets, real estate, proprietary investing, and alternative investments. Previous positions Richard has held include Managing Director at Ivy Asset Management Corp., a leading alternative investment asset management firm, Managing Director-Principal at Bear, Stearns & Co., where he was the head of North American Structured Credit Distribution, and Director in the Principal Transactions Group at Credit Suisse First Boston, responsible for investing the firm’s proprietary capital. Richard has a Bachelor of Science in Economics from the Wharton School of the University of Pennsylvania, and a J.D. and L.L.M. (in Taxation) from the New York University School of Law.

LinkedIn: https://www.linkedin.com/in/richardluftig